Technical efficiency changes at the farm-level: A panel data analysis of rice farms in Bangladesh

Abstract

This paper examines technical efficiency changes at the farm-level for rice farms in Bangladesh over a 17 year period (1987 to 2004) using nationally representative panel data. Results from the stochastic production frontier analysis indicate that technical efficiency of the rice farmers has declined from 83% to 60% over this period due to a host of farm as well as socio-economic factors. Age, education, tenure status and involvement in off-farm work are factor negatively influencing technical efficiency while the relationship with farm size is positive. Under the current production technology and input use, 40% higher production could be reached by removing technical efficiency which is substantial. Policy recommendations include consolidation of land and strengthening of extension services. Key words: Technical efficiency, rice farms, efficiency elasticity, panel data, Bangladesh.